Despite earnings losses, Continental saw increased oil production in 2019


Oklahoma City’s Continental Resources reported a loss of quarterly and yearly revenues, showing its net income for the quarter that ended Dec. 31, 2019 totaled $193.9 million or $0.53 per diluted share. It was down from the $197.7 million reported a year earlier.

It came as the company remained the number one oil producer in Oklahoma as well as the Bakken where the company was considered one of the pioneers in North Dakota’s shale oil boom. The company also indicated it’s not swerving much from its 2020 capital expenditures.

“Operationally, 2019 was an exceptional year. We met or exceeded all of our guidance and delivered 18% oil production growth year-over-year. We also consummated strategic trades, bolt-on acquisitions and leasing in Continental-dominated core areas for approximately $165 million, adding up to 370 gross operated locations to our deep inventory position,” said Harold Hamm, Executive Chairman.

Adjusted net income for fourth quarter 2019 was $203.6 million, or $0.55 per diluted share (non-GAAP)up from the $201.6 million reported in the fourth quarter of 2018.  Net cash provided by operating activities for fourth quarter 2019 was $803.8 million and EBITDAX was $905.5 million (non-GAAP).

The Company reported full-year 2019 net income of $775.6 million, or $2.08 per diluted share. But it too was down from the nearly $989 million in net income reported the previous year.

Adjusted net income for full-year 2019 was $838.7 million, or $2.25 per diluted share (non-GAAP), down significantly from the more than $1 billion reported in 2018.

Net cash provided by operating activities for full-year 2019 was $3.12 billion and EBITDAX was $3.45 billion (non-GAAP).

In releasing the earnings report, Continental Resources also boasted it made $442 million in total debt reduction. As for 2020, the company’s capital expenditures budget will be flat year-over-year at $2.65 billion and the company’s estimated capex spend will be 20% lower than the firm’s original five year vision for the year.

“An estimated $700 million of capital to be spent in 2020 will not realize first production until 2021 as the Company prioritizes large scale multi-pad development projects in SCOOP and Bakken Long Creek,” stated the earnings release.

Consequently, at year-end 2020, the Company expects to have a working backlog of approximately 242 gross operated wells in progress in various stages of completion, which is 12% higher than year-end 2019. This includes 188 gross operated wells in the Bakken, which is 42% higher than year-end 2019.

“Looking to 2020 and beyond, Continental expects to continue to be the low cost leader among our oil-weighted peers as we maximize performance and returns from our growing, high quality assets,” said Jack Stark, President and Chief Operating Officer.

The Company is allocating approximately $2.2 billion to drilling and completion (D&C) activities, of which approximately 60% is allocated to the Bakken and approximately 40% to Oklahoma. The non-D&C capital is planned to be primarily focused on leasehold, mineral acquisitions, workovers and facilities. 

Full-year 2019 production increased 14% over full-year 2018, averaging 340,395 barrels of oil equivalent per day (Boepd). 2019 oil production increased 18% over 2018, averaging 197,991 barrels of oil per day (Bopd). 2019 natural gas production increased 10% over 2018, averaging 854.4 million cubic feet per day (MMcfpd).

Fourth quarter 2019 total production increased 13% over fourth quarter 2018, averaging 365,341 Boepd. Fourth quarter 2019 oil production increased 10% over fourth quarter 2018, averaging 206,249 Bopd. Fourth quarter 2019 natural gas production increased 16% over fourth quarter 2018, averaging 954.6 MMcfpd.

In the Bakken, Continental Resources saw 148,416 average daily 2019 oil production which was up 14% over 2018. The company completed 172 operated wells with first production and 75% of the program wells are paid out.

In Oklahoma, the company said it had 41,695 average daily 2019 oil production which was up 43% above 2018 production.  During the year, the company completed 140 gross (98 net) operated wells with first production in the South. In SCOOP, Project SpringBoard produced an average 25,006 net Bopd, outperforming the Company’s expectations announced in third quarter 2018 by 50%.


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Source: Continental Resources earnings report